Contractors' Plant & Machinery (CPM) Insurance Malaysia
All-risks external physical protection for mobile plant and cranes
Standard Commercial Fire and Contractors' All Risks (CAR) Section I wordings exclude mobile construction plant and yellow machinery unless specifically scheduled. Contractors' Plant & Machinery (CPM) insurance provides annual renewable protection for excavators, bulldozers, mobile cranes, paving machines, and factory forklifts operating across project sites in Malaysia. Coverage applies whether the insured machine is actively operating at a work site, parked at rest inside a depot, or undergoing dismantling and re-erection for maintenance.
CPM Sum Insured Basis = Current New Replacement Value of the Identical Machine (Including Freight, Customs Duties & Erection Costs)
Mandatory Reinstatement Value basis and DOSH (JKKP) PMA compliance
Unlike private motor policies that insure vehicles on depreciated market value, CPM policies require every scheduled machine to be insured at its full New Replacement Value—even if the excavator or crane was purchased second-hand. Insuring a five-year-old crane for its depreciated purchase price triggers the Condition of Average on every partial repair claim for hydraulic booms, wire ropes, or structural frames. Additionally, hoisting machinery such as mobile cranes and tower cranes must hold a valid DOSH Certificate of Fitness (PMA) and be operated by a DOSH-registered competent operator.
Coverage & Technical Matrix
| Coverage Component / Parameter | Status / Basis | Underwriting Notes |
|---|---|---|
| Collision, Overturning & Subsidence | Covered (Core CPM Wording) | Indemnifies accidental tipping, slope collapse, and site impact |
| Fire, Lightning, Flood & Storm | Covered | Protects plant parked at construction sites or warehouse compounds |
| Inland Transit Between Project Sites | Optional Endorsement | Covers loading, low-loader road transport, and unloading across Malaysia |
| Third-Party Liability (Owner's Plant) | Optional Endorsement | Covers off-road site liability for bodily injury or surrounding property damage |
Standard Policy Exclusions
- Internal mechanical or electrical breakdown, overheating, or seizure (though external physical damage resulting from such breakdown is covered)
- Gradual wear and tear, cavitation, rust, corrosion, or replacement of consumable parts such as drill bits, cutting edges, belts, chains, and rubber tires
- Loss or damage occurring while the plant is operated underground, on floating barges/pontoons, or tested beyond safe working load (SWL) limits unless endorsed
- Public road Third-Party liability required under the Road Transport Act 1987 (road-registered cranes/forklifts require a separate Commercial Motor policy for public highway use)
Underwriting & Quotation Requirements
- Itemized plant schedule detailing Make, Model, Year of Manufacture, Serial/Chassis Number, Engine Number, and New Replacement Value
- Valid DOSH Certificate of Fitness (PMA) for mobile cranes, tower cranes, and regulated hoisting equipment
- Exact geographical project site locations and description of terrain (e.g., general earthworks, quarrying, logging, or riverine works)
- Hire-purchase or leasing bank financier details to endorse the Hire Purchase / Leasing Clause
Frequently Asked Technical Questions
Why must we insure a 6-year-old second-hand excavator for its brand-new replacement price under a CPM policy?
Partial repairs on an old excavator require buying brand-new OEM hydraulic pumps, booms, and undercarriage components at today's prices. Because CPM wordings pay partial repair bills without deducting depreciation, underwriters require the Sum Insured to equal the full New Replacement Value; otherwise, the Condition of Average reduces your claim payout proportionally.
Does a CPM policy replace the need for road tax and motor insurance on a mobile crane?
No. If a mobile crane or backhoe is driven on public roads in Malaysia, it must carry a statutory Commercial Vehicle Motor policy to comply with JPJ and the Road Transport Act 1987. The CPM policy covers physical damage and operational overturning while working on-site.